Author: Steven D. Thompson
Updated: 28/04/2022 5:02 PM
Sports Betting Bankroll Management
Bankroll management is an important factor to consider if you want to succeed in any form of real money gambling. As a punter, you must have a cleara of how much money you are willing to spend on sports betting. And you must have a plan and follow it to avoid potentially harmful spending behaviour. We have prepared this guide to help both novice and experienced sports bettors manage their bankrolls for the best gambling experience.
What is Bankroll Management in Sports Betting?
Any sports bettor looking to gamble safely must have the right bankroll management skills. In sports betting, the term bankroll refers to the amount of money you’ve set aside for gambling. If you have an initial bankroll of £500 and lose all of it, you won’t go ahead and make another deposit. And that’s where the management part comes into play.
From a business point of view, money management entails budgeting, allocating resources and overseeing the usage of an individual. Bankroll management in sports betting is no different because you are basically creating a budget and adhering to it.
You then need to act accordingly and ensure you don’t spend an amount of money you cannot afford to lose. Any punter can do this by employing sound bankroll management approaches. With the right technique, you can even turn yourself into a professional sports bettor.
Features of a Good Sports Betting Bankroll
Having a betting bankroll doesn’t necessarily mean having a huge amount of money in your bookmaker account. Even though it’s good to have enough, your bankroll must meet certain criteria. Your betting funds cannot be the same amount you want to spend on bills. Let’s talk about this and other characteristics of theal bankroll for sports betting.
Separate from Personal Money
It’s a big mistake to keep your betting bankroll together with other funds. You must ensure that your betting money is separate from the funds you spend on everyday needs such as food, bills and loans. If possible, have a different account for sports betting purposes to avoid mixing things up. This is much easier when betting online because you only need to transfer the funds you wish to spend on bets to your sportsbook account.
An independent bankroll for betting presents two noteworthy benefits to the punter. First of all, it makes it easy to follow the betting strategy you have chosen. You can spend the money on bets without worrying about anything if you store your other funds separately.
Secondly, your sportsbook bankroll will bring you peace of mind in times of emotion. Even though losing money is hurtful, it will be less painful when you know that the money was for betting. You won’t sleep hungry because you have more money elsewhere.
To be honest, there’s no need to deposit funds into your betting account if you still need the money. It doesn’t make any sense to fund your account and then withdraw everything a day later. You must be very decided before you deposit, so you won’t have to cash out even before you start placing bets.
Gambling is all about taking risks, so you must be ready to keep your deposit in your gaming account for the longest time possible. Your bankroll is like an investment because you need it to make more money. A profitable sports bettor is willing to take huge risks, forget any losses and take a second chance.
Bet Sizing and Units - How Much Money Should You Bet?
One of the biggest questions most new sports bettors ask is what bet size is reasonable. It’s very risky to bet without knowing how much money you should spend on wagers. Let’s consider two sports punters, each with a total bankroll of £400. The first punter decides to place sports bets worth £10 each while the second one places bets worth £200 each.
In this case, the first bettor can place as many as 40 bets, while the second bettor can only place two bets. Obviously, the first bettor has higher chances of playing longer even when things go wrong. The second bettor will lose a lot of money quickly if their prediction is wrong. And that’s why it’s essential to understand bet sizing and units.
Once you’ve set aside your sports betting bankroll, you need to determine the percentage you want to spend on bets. The recommended unit size is between 1% and 5% of the amount of money in your bankroll. New punters should begin at 1% to 2% and advance to higher percentages after sharpening their betting bankroll management skills. A professional sports bettor who is skilled and aggressive enough could work well with a bet amount worth 4% or 5% of their sports betting bankroll.
Taking Variance Into Consideration
Variance is one crucial thing that all successful sports bettors must keep in mind when making bets. Even if you are an experienced professional bettor, you can still lose a big percentage of the bets you make over the long run. Variance can make you lose in the short term, even if you are always making good value bets at online bookmakers.
The best way to deal with variance issues in sports betting is to consider the types of bets you want to place. Some bets will have a higher variance and thus require you to endure more losses before you enjoy your profits.
Your sports betting bankroll is most likely to fluctuate if the selected bet types are less likely to win. For instance, point spread bets on a football match have much less variance than when placing a parlay bet with six teams.
Don’t Forget Betting Odds When Placing Bets
Besides your bankroll and variance, the betting odds will play a vital role in determining your desired bet size. You might unexpectedly come across odds with good value and ultimately want to take full advantage of them.
When this happens, you may decide to increase your bet with the amount of risk you are willing to take in mind based on your budget. If you are an aggressive bettor, for example, you could increase your maximum bet size from 4% to 5% of your total bankroll when the odds are favourable.
Popular Betting Bankroll Management Strategies
Whether you are a hobbyist or a professional bettor, it helps to have a winning strategy. The good news is there are several options to suit the needs of different types of bettors. All you have to do is determine which bankroll management strategy works best for you. We have explained the various strategies in the following section, so keep reading.
Fixed Unit Model
This is the simplest strategy for bankroll management at sports betting sites. It is recommended if you have never used a bankroll management system before. As the name suggests, you simply choose your preferred bet unit and wager the same amount of money all the time. This usually involves setting the maximum bet amount you don’t mind losing if you get things wrong.
Let’s say your total bankroll is £100. You have then divided the amount into 100 units, so each unit is worth £1. In this case, you may decide to only bet £1 on all events regardless of what happens. The odds, your confidence level and past performances don’t matter here.
One advantage of using the fixed unit model is that it’s easy even for new punters. Secondly, it makes it possible for users to track their wins and losses hassle-free. However, it does not take into account the amount won or lost in the past when planning for future bets.
Some professional sports bettors will consistently bet a certain percentage of the amount they have set aside for wagering. This approach is what we call the percentage model in the world of betting. It’s similar to the fixed unit model, except that the unit size will vary depending on your betting bank. In other words, the size of your bet increases as your bankroll grows and decreases when you lose a bet. You must first establish a fixed percentage to determine how much money you need to wager.
Consider ang bankroll of £1,000 and a bet size worth 2% of this amount. If you do your calculations well, your first bet is going to be £20. Now, things will take a different turn if you get lucky and win some money. Let’s say your profit is £20, so your newng bankroll is £1,020. Your bet size will now increase to £20.4. It will keep increasing as long as you are winning. The biggest advantage is that you can use this strategy to capitalise on winning streaks. But yourng bankroll will keep decreasing if you are on a losing streak.
The Kelly Criterion (The Full Kelly)
The Kelly Criterion model is one of the more complex strategies you can use to prevent poor money management when betting online. Although risky if used constantly, it can help you calculate the optimal wager if you want the value of your bet to match the expected benefit. It helps you make the most of the available betting odds based on their value and the probability of a player or team winning.
You must first determine your exact winning percentage for each bet to use the Kelly Criterion strategy. Next, you need to insert that number into a formula to calculate the percentage of your overall bankroll you should spend on a bet. The formula is as follows:
Decimal Odds * Win Probability – Loss Probability) / Decimal Odds = Optimal Wager Percentage
This strategy requires a basic understanding of mathematics and betting odds to use. Also, you must be very good at estimating your chances of winning the bet in question. If your win probably is 55% or 0.55, then it means that your loss probability is 45% or 0.45. Depending on your accuracy of estimating the value, the Kelly Criterion model may suggest a ridiculous optimal bet amount, so you must be careful when using this strategy.
Fractional Kelly - Half Kelly and Quarter Kelly
The Kelly Criterion may also take the form of Fractional Kelly, allowing you to choose between Half Kelly and Quarter Kelly. You could also choose your preferred percentage depending on how much risk you are ready to take. This is a more conservative method if you think the optimal wager amount suggested by the Full Kelly is too risky for you.
As the name implies, the Half Kelly Criterion suggests betting 50% of Full Kelly. If the Fully Kelly is 8% of your overall bankroll, then the Half Kelly is 4% of your total bankroll. And a Quarter Kelly would be 2% of your betting bank. As you can see, the Fractional Kelly strategy lowers the risk of losing too much money in case your bets fail to hit a win.
The confidence model is an interesting bankroll management strategy based on how confident you feel as a bettor. Many of us have used this technique unknowingly because some of our decisions are based on our confidence levels. The more confident you are, the more likely you are to place a much bigger bet. In contrast, you will often place a small bet if your instincts tell you that you are unlikely to win. Your decision to place a big or small bet could also be based on the team’s performance in previous matches.
As with most betting bankroll management strategies, you need to determine your bet size when using the confidence model. The next step is to choose the number of bet units based on your confidence level. We recommend a 1-3 unit scale, but you are free to use a 1-5 scale based on your degree of confidence. If you like, you can decide to bet 2, 3, 4 or even 5 units of your total bankroll. The risk increases the higher you go, but so does the amount you stand to win if your prediction is on point. This strategy isal for parlays and money line bets on underdog teams or players.
The Fibonacci Method
This method of bankroll management is based on the Fibonacci sequence of numbers. It was named after an Italian mathematician who invented it in the twelfth century. When using the Fibonacci betting strategy, your bet size will depend on your winning or losing streak.
Let’s first talk about the sequence so you can understand the basics. All you need to know is that the next number in line is the sum of the previous two numbers. The sequence begins with the numbers 1 and 2, but these represent your bet size in sports betting.
Here is what a simple Fibonacci sequence looks like:
1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144…
The Fibonacci strategy is a negative progression betting system. In other words, you are required to increase your bet size if you lose and lower it if you win. You must move one number up whenever you lose a bet and move two numbers down if you win.
Let’s say you’ve bet £10 (one unit) and lost. Your second bet will still be £10. If you lose this one, your third bet should be £20 (two units). In case of another loss, your fourth bet should be £30 (three units).
The Importance of Bankroll Management to Sports Bettors
Bankroll management is very important if you want to become a successful sports bettor. Gambling is a risky activity, and so many things can go wrong if you don’t use the right betting strategy. You want to adopt a betting bankroll management system that prevents you from spending more money than you should. Let’s look at some of the reasons why you need to manage your sports betting bankroll.
It Protects Your From Losing Streaks
A good bankroll management strategy will come in handy when luck is not on your side. Seasoned gamblers know that betting is all about winning and losing. Theal situation is to win every bet, but the sad reality is that it’s hard to win all the time. One of the worst experiences is when you are on a losing streak.
Both amateur and professional sports bettors find it hard to handle one loss after the other. We are often tempted to place one more bet hoping to recover our losses in the long run. The urge to keep betting even when you are losing is commonly known as chasing losses in the sports betting world. It can be very frustrating if you lose too much money in the end.
We should also point out that even a winning streak can be potentially dangerous depending on the actions you take. When you are hit one win after another, you might want to place more bets only to end up ruining everything. If you use a reliable betting bankroll management technique, you won’t spend any money you had not planned to use regardless of the situation.
It Helps You Prevent Gambling Addiction
Gambling addiction is one of the biggest problems any casual or professional bettor might face. When you develop an addiction, it’s extremely difficult to stop gambling, no matter how hard you try. You’ll find yourself betting at odd hours of the night, borrowing money to bet or even spending more money than you should. An addition may also have devastating impacts on your relationships with other people if you gamble at the wrong time or place.
Proper bankroll management can save you from potentially harmful habits. Of course, you must be a disciplined punter if you want to prevent any form of problem gambling. Let’s say your budget requires you to spend a maximum of £20 per day. If you stick to your budget, you’ll note place bets worth more than the said amount no matter the outcome.
As a result, you’ll be able to focus on other things and avoid excessive gambling. Thea here is to set a budget and follow it. If you don’t have a sports betting budget, you can easily keep betting and become addicted without noticing.
It Adds Legitimacy to Sports Betting
If you are not new to sports betting or gambling in general, you know that not many people will take you seriously. Some people only think that it’s a waste of time and money. Many will be sceptical about the possibility of becoming a big winner and don’t even think that betting can be a profession. Well, you could change their minds by simply showing them that you don’t gamble blindly.
Your sports betting career will definitely look legitimate if you have a well-crafted gambling plan. That plan entails creating a budget and managing your bankroll. It would be much easier to convince someone that what you are doing is serious if you have a money management strategy. This way, they’ll know that you are not gambling for the sake of it. You’ll also take sports betting seriously if you plan well and do the right thing.
Tips to Manage Your Sports Betting Bankroll Effectively
There’s no denying that adopting the right betting strategy is paramount if you want to become a successful sports bettor. But there’s always something extra you and do to improve your bankroll management skills and place more profitable sports bets. The following are some great tips if you would like to boost your bankroll management tactics and avoid the mistakes made by other bettors.
Track Your Results All the Time
The only way to know your progress as a punter is to track your bets at a gambling site. You’ll find this useful if you often place sports bets at various bookmakers. It helps to keep detailed records of your wagers irrespective of which betting bankroll management strategy you are using. You can do this using a simple MS Excel spreadsheet with columns listing bookies, bankroll amount, bet amount and bets won.
It’s easy to know if your bets are profitable if you have an accurate journal of your bets. With the right information, punters can determine the steps they need to take to maximise their sports bets. This is why it is important to make sure that your bankroll is separate from other money accounts or budgets you have.
Tracking your results entails analysing them to determine your performance. This allows you to see how well you are doing. For example, it’s easy to tell whether you are good at moneyline bets, spread bets or parlays if you have a record of your bets. You can even calculate the percentage of bets won or lost. If your winnings are more than the losses, then you are using a winning strategy.
Know Your Financial Status
The truth is that we are all different when it comes to financial capacity. Some people have enough money to spend on as many sports bets as they want. Others can only spare a few coins for sports betting. If you are the latter, then it means that you can only set aside a smaller bankroll. Also, remember that your bankroll determines how much money you can stake on any individual bet.
Don’t deposit £1,000 into your sportsbook account if that’s the only money you have. Such a poor bankroll management strategy can lead to adverse effects if you lose everything. The bottom line is that you should only wager with money you are willing to lose. And it shouldn’t affect your life if you lose all of your betting money.
Place Bets When Sober
You must be in the right state of mind when placing bets if you want any bankroll management technique to work. Those who bet under the influence of alcohol or drugs risk losing their bankrolls unceremoniously. You definitely don’t want this to happen because you might end up wasting more money than you would if you were sober.
Be sure to place bets before you start drinking to avoid risky gambling behaviours. You can’t afford to wake up the next day with a depleted bankroll and zero wins just because you were not yourself when placing yesterday’s bets. All we are saying is you should avoid making irrational bets by staying away from any substance that could influence your thought process.
Don’t Let Emotions Overwhelm You
Every punter needs to be strong enough to avoid making decisions based on emotions. Your feelings can take you on a rollercoaster and make you place bets you should not have placed in the first place. A good example is when you lose a bet and place another bigger bet in an attempt to recover your losses.
The situation worsens if you lose many consecutive bets and wager more because you are angry. You might eventually exhaust your entire bankroll and thus have nothing left to bet with. Sound bankroll management is what you need to avoid such a bumpy ride and prevent chasing losses.
Recalculate Your Risks and Update Bet Percentages
We recommend recalculating your risks to determine the most appropriate bet amount. If you are using the percentage model, you’ll realise that percentages will fluctuate as your bankroll fluctuates. With this in mind, an aggressive punter who places bets worth 5% of their bankroll takes huge risks. This means that their potential losses are significantly high.
So, it’s important to have a strategy for mitigating potentially dangerous losses. The key factors to consider here include the type of bet and your past performances. Consider lowering the percentage if you’ve been on a losing run and when the bet is too hard to win. Another great option is to bet sporadically if you wish to bet the same amount of money. For example, you could place one bet a week instead of three. This will help to sustain your bankroll much longer and thus place more bets.
As we have seen, the importance of bankroll management in sports betting should never be ignored. Seasoned bettors know how much they are willing to deposit and the risks they can withstand at online bookmakers. They also understand that it’s crucial to implement a proven betting strategy to succeed. We hope that the techniques discussed in this guide will help you become a successful bettor wherever you go. Use them to manage your bankroll and see how they will change your overall betting experience.
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Frequently Asked Questions
What is bankroll management in sports betting?
Betting bankroll management is the practice of allocating a gambling budget, adhering to it and making good picks when placing bets. You simply set aside the amount of money you are willing to spend on bets and then use it strategically.
What’s the importance of bankroll management?
Proper bankroll management protects you from any betting habits that could lead to harmful gambling behaviours. It capitalises on strategies that suggest the right bet amount to lower the risk of losing too much money. You won’t chase losses or bet without a plan if you employ a bankroll management strategy.
How much money should I bet to be safe?
The amount of money you should bet will depend on things like the strategy you are using and your confidence level. All in all, it’s advisable to bet 1% to 2% of your bankroll if you are conservative. If you can bear an average amount of risk, then you can bet 3% of your bankroll. Highly confident risk-takers can bet between 4% and 5% of their bankrolls.